New analysis of Nashville area development reveals opportunity for public savings

The Gulch
The Watermark restaurant in The Gulch district in Nashville. The Gulch generated far more revenue per unit than the two other development scenarios. Photo by The Gulch.

Tennessee taxpayers could save money by using smarter development strategies, according to new research published by Smart Growth America.

Fiscal impact analyses of three development scenarios in Nashville-Davidson County, TN (PDF) examines the public costs and benefits of three development scenarios in Nashville-Davidson County: The Gulch, a smart growth oriented development project; Lennox Village, a New Urbanist-style development in a ‘greenfield’ location; and Bradford Hills, a conventional suburban residential subdivision outside of the city.

The study examines the cost of providing ongoing city services to the residential component of each project, including police, ambulance and fire service costs as well as the overall impact to the County’s general fund. Upfront infrastructure cost was not included in the analysis. The analysis found:

  • Infill development had lower service costs. On a per-unit basis, Lennox Village (the New Urbanist-style development) had the lowest cost to provide services at $1,300 per unit per year. The Gulch (smart growth development) cost $1,400 per unit per year. Bradford Hills (the conventional suburban development) had the highest cost of $1,600 per unit per year. Service to Lennox Village cost 19 percent less than Bradford Hills and The Gulch cost 13 percent less.
  • Infill development generated the most revenue per unit. All three scenarios generated a revenue to the general fund, on a per-unit basis. The Gulch had by far the largest revenue, generating $3,370 per unit. That rate is more than twice as high as the Bradford Hills scenario, which generated $1,620 in revenue per unit. Lennox Village generated $1,340 in revenue per unit. (Revenue included property tax but also the sales tax likely to be generated by the project’s residents as well as other miscellaneous taxes.)
  • Infill development generated the largest surplus. On a per-acre basis, The Gulch generated $115,720 in net revenue – almost 1,150 times the net revenue generated by Bradford Hills ($100) and 148 times the net revenue of Lennox Village ($780). The Lennox Village project generated a surplus 7.8 times higher than that of Bradford Hills on a per-acre basis. These trends are similar on a per-unit basis as well.

William Fulton, Vice President of Policy Development and Implementation for Smart Growth America, unveiled the findings last night as part of his presentation for the Nashville Next speaker series. The research was conducted by Strategic Economics on behalf of Smart Growth America.

Nashville analysis to be included in national findings

The Nashville findings will be included in a forthcoming report, Building Better Budgets: A National Examination of the Fiscal benefits of Smart Growth Development due out later this month from Smart Growth America.

The report surveys 17 case studies that compare the fiscal implications of different development scenarios. The report will include first-of-its-kind national conclusions about the cost savings of smart growth strategies.

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Download the analysis

Fiscal impact analyses of three development scenarios in Nashville-Davidson County, TN
Smart Growth America, 2013

Nashville analysis

Read more: Growth planner urges less sprawl in Nashville [The Tennessean – April 21, 2013]

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    2 Responses to New analysis of Nashville area development reveals opportunity for public savings

    1. Splanner says:

      Looks like a good analysis, but possibly reflects a conservative estimate of revenues across the three land uses. The average household income probably doesn’t reflect most of the households in these developments. If it was possible to grade the income according to household value, that might offer a closer picture of how these uses will affect fiscal state. Regardless, a good comparison among the three.

    2. Mike Hodge says:

      So — if I understand this article properly, we need MORE Gulches in Nashville, where low and moderate income residents are priced out and are totally unable to live. This is a curious suggestion from “SmartGrowth America: Making Neighborhoods Great Together.” Is Smart Growth only determined only by the amount of revenue generated per unit? If so, a better tag line would be “Making Neighborhoods Where the Wealthy Can Be Great Together.” Would also be interesting to see what the “hidden” costs of this kind of income segregation are — so that all the costs and benefits are seen together.

      I fail to see how concentrating people with higher incomes — and removing the possibility of affordable housing — is “SMART” growth. It’s just more of what’s been going on for years — a process that has split neighborhoods and built up distrust from those priced out. Seems to me that REAL “smart growth” would help create neighborhoods and cities where all are welcome — as that comes closer to creating community, which is one of the major goals of cities.

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